Jubilant FoodWorks share price jumps 9% after Q2 results. Should you buy the stock?

Jubilant FoodWorks share price jumped nearly 9% on Tuesday after the Domino’s Pizza-operator reported its Q2 results. Jubilant FoodWorks shares rallied as much as 8.98% to ₹655.95 apiece on the BSE.

QSR chain operator Jubilant FoodWorks posted a consolidated net profit of ₹66.53 crore in the second quarter of FY25, registering a fall of 31.55% from ₹97.2 crore in the year-ago quarter.

The company’s revenue from operations in Q2FY25 increased 42.8% to ₹1,954.72 crore from ₹1,368.63 crore, year-on-year (YoY). The company reported Like-for-Like (LFL) growth of 2.8% led by 11.4% LFL growth in delivery channel, increasing newer consumers and rising pace of innovation.

At the operational level, while EBITDA grew 43.8% YoY to ₹398.6 crore, EBITDA margin improved by 14 basis points (bps) to 20.4%.

Analysts positive on Jubilant FoodWorks

“Jubilant's positive LFL growth in Q2FY25 has set it apart in a challenging market. The company's focus on delivery and innovative strategies has fuelled this success. Jubilant's strategic moves to stimulate consumption, from revamped menus to free deliveries, are paying off, revitalising both delivery and dine-in businesses,” said Nuvama Institutional Equities.

The brokerage firm remains bullish on the company’s turnaround potential and reiterated a ‘Hold’ rating on Jubilant FoodWorks shares and raised the target price to ₹631 per share from ₹568 earlier.

According to Motilal Oswal, the QSR industry is still reeling under pressure on unit economics, while Jubilant FoodWorks was the beneficiary of healthy traffic growth for the delivery business.

“Delivery is expected to outperform in the near term, which will continue to lead to better growth metrics than Jubilant FoodWorks’ peers in the near term. Operating margin is likely to experience slower recovery owing to Jubilant FoodWorks’ continuous reinvestment in its core capabilities,” MOFSL said.

The brokerage firm reiterated ‘Neutral’ rating on Jubilant FoodWorks stock with a target price of ₹625 per share, valuing the India business at 35x EV/EBITDA and the international business at 15x EV/EBITDA.

Jubilant FoodWorks Stock Price Update

Jubilant FoodWorks share price has gained nearly 4% in the past one month, but remained stable in three months. However, the stock has rallied nearly 16% year-to-date (YTD) and more than 28% in the past one year period.

At 12:30 PM, Jubilant FoodWorks shares were trading 8.63% higher at ₹653.80 apiece on the BSE. 

Disclosure: The promoters of HT Media Ltd, which publishes Mint, and Jubilant Foodworks are closely related. There are, however, no promoter cross-holdings

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.